James Cacioppo

About James Cacioppo

Founder, Chief Executive Officer, and Chairman of Jushi Holdings Inc.; age 62; director since 2018. Education: BA, Colgate University; MBA, Harvard University. Prior to Jushi, he spent two decades in senior hedge fund roles, including Co‑Founder/Managing Partner at One East Partners (peak AUM $2.3B), President/Co‑PM at Sandell Asset Management (peak AUM $5B), and Head of Distressed Debt at Halcyon Management (AUM >$9B), bringing capital allocation and turnaround expertise to Jushi . Jushi is an emerging growth and smaller reporting company; executive compensation disclosures are scaled and say‑on‑pay votes are not required until at least FY2027, limiting external feedback signals on pay alignment .

Past Roles

External Roles

Fixed Compensation

Performance Compensation

Performance metrics used to determine discretionary incentives include acquisition activity, equity raises, revenue growth, EBITDA growth, and talent recruitment/retention; the compensation committee retains full discretion (no fixed weightings disclosed) .

Option Repricing (Retention/Motivation Signal and Governance Risk)

• 9/13/2024 replacement options following cancellation: 5,385,000 CEO options repriced to $0.54 (from $2.00 and $1.93) with vesting restarted; 50% vested immediately on 9/13/2024 and 50% vesting on 9/13/2025 .
• Repricing extended to non‑employee directors, with 394,758 total director replacement options @ $0.54 vesting one year post‑grant .
  This is a red flag for investors as it reduces at‑risk pay sensitivity to past underperformance and resets vesting clocks .

Equity Ownership & Alignment

CEO Outstanding Equity Awards and Vesting

Employment Terms

• Agreement: At‑will CEO/Chairman employment; initial term two years and one day; auto‑renewal for one successive two‑year period unless 60‑day prior notice .
• Base salary: $850,000; annual bonus target 100% of base with floor “not less than” 100% of base; LTI awards specified through 1/1/2026 (3,000,000 stock options annually, with detailed vesting schedules) unless amended .
• Severance (no‑cause/non‑renewal/good‑reason): $5,000,000 lump sum + grant of next LTI award (or economically equivalent comp) + full vesting of all outstanding equity awards, subject to a release .
• Change‑of‑control: $5,000,000 lump sum + next LTI award + full vesting; full 280G excise tax gross‑up applies (shareholder‑unfriendly) .
• Death/disability: Pro‑rata bonus, 18× monthly COBRA premium cash, and full vesting (with release/eligibility conditions) .
• Restrictive covenants: Non‑compete during employment and 18 months thereafter; non‑solicit during employment and two years thereafter .

Board Governance

• Roles: Combined CEO and Chairman (Cacioppo); Lead Independent Director is Stephen Monroe, who chairs executive sessions and coordinates independent oversight .
• Independence: Cacioppo not independent; four of five directors independent under Canadian NI 52‑110 (Cross, Monroe, Hahn, Wafford) .
• Committees:
  • Compensation Committee: Cacioppo (Chair), Cross, Monroe; Cacioppo recuses on matters relating to himself .
  • Nominating & Corporate Governance Committee: Cacioppo (Chair), Cross, Monroe .
  • Audit Committee: Wafford (Chair), Monroe, Cross; all independent and financially literate; Wafford is an SEC “audit committee financial expert” .
• Attendance: Board held one meeting and 17 unanimous written consents in 2024; all directors met ≥75% attendance except Cacioppo at compensation committee due to recusals on related‑party topics .
• Board service history: Cacioppo director since 2018; continues as CEO/Chair .
• Director compensation: CEO receives no additional cash fees for Board service (non‑employee director retainers disclosed separately) .

Director Compensation (for context)

Non‑employee director annual retainers: $70,000; +$20,000 for Lead Independent Director; +$30,000 for Audit Chair; directors received repriced options on 9/13/2024; CEO receives no director fees .

Related Party Transactions (and Governance Controls)

• Credit Agreement (7/31/2024): $48.5M secured term loans; 19.4M warrants @ $1.00 expiring 7/31/2029; affiliated entity of Cacioppo provided $9M term loan and received 3.6M warrants; Denis Arsenault also participated ($7M, 2.8M warrants). Second Lien Indenture amended with approval thresholds excluding insider votes .
• S‑3 (9/13/2024): Registered 23.4M shares for resale connected to Term Loan warrants; affiliated entities of Cacioppo included .
• ERC tax refund claims (2/18/2025): Affiliates sold ~$6M ERC refunds for ~$5.1M net; consent fees paid to Term Loan holders; affiliated entity of Cacioppo received $120,000 .
• Private placement (2/25/2025): Sold ~$5.1M principal of 12% Second Lien Notes + ~8M warrants @ $0.48; affiliated entity of Cacioppo purchased ~$US3.7M notes and ~5.8M warrants .
• Option Repricing (8/12/2024 approval; grants 9/13/2024): CEO/DOS and non‑employee directors repriced underwater options; vesting restarted; see details above .
• Policies: Audit Committee and Board review related‑party transactions; the company intends to adopt formal written policies but did not have them during the period; MI 61‑101 applies for Canadian minority protection .

Risk Indicators & Red Flags

• 2021 Ontario Securities Commission MCTO due to delayed FY2020 audit; revoked June 9, 2021; shows prior control/reporting risk (CEOs subject to cease trade during period) .
• Jushi Europe SA bankruptcy (5/19/2022) while Cacioppo was a director, highlighting operational/credit risk in international affiliate .
• Option repricing for CEO and directors (9/13/2024) and restarted vesting schedules—generally shareholder‑unfriendly and dilutive if performance was below expectations .
• No formal written related‑party policy during the period; heavy insider participation in financings and consent fees raises governance scrutiny .
• 280G excise tax gross‑up on change‑of‑control for CEO—rare and a governance red flag in modern pay design .
• Combined CEO/Chair with committee chair roles (Compensation and Nominating) may reduce independent oversight; mitigated by lead independent director structure, but still a concern for independence and dual‑role implications .

Compensation Structure Analysis

• Cash vs equity mix: CEO bonuses for 2022–2024 restructured into fixed cash and company debt (12% Second Lien Notes) plus equity (options/warrants), reducing near‑term cash outflows while increasing leverage to company credit and equity recovery .
• Shift to options/warrants: Repricing underwater options to $0.54 and issuing new options/warrants at lower strikes shift risk from executives to shareholders and improve in‑the‑money potential without market‑driven performance, a classic red flag .
• Guaranteed bonus floor: Annual bonus “not less than” 100% of base salary under the employment agreement dampens pay‑for‑performance tension and increases guaranteed compensation .
• Performance metrics: Discretionary, qualitative metrics with no disclosed weights/targets (acquisitions, equity raises, revenue, EBITDA, talent) limit investor ability to evaluate pay outcomes vs targets .
• Tax gross‑ups and single‑trigger benefits: 280G gross‑up and immediate vesting on change‑of‑control increase parachute economics materially .

Performance Compensation (metrics table)

Say‑on‑Pay & Shareholder Feedback

Jushi is an emerging growth company and smaller reporting company; advisory say‑on‑pay votes are not required, limiting shareholder signal on executive pay outcomes .

Expertise & Qualifications

• Education: BA (Colgate), MBA (Harvard) .
• Technical expertise: Distressed investing, capital allocation, hedge fund management .
• Board qualifications: Founder‑CEO, significant beneficial owner; not independent; Lead Independent Director structure in place .

Work History & Career Trajectory

• Career progression from hedge fund leadership to founding Jushi; extensive capital markets experience with large AUM platforms .
• Executive tenure: Director since 2018; continuing as CEO/Chair .

Compensation Committee Analysis

• Membership: Cacioppo (Chair), Cross, Monroe; last met three times in 2024; Cacioppo recuses on matters related to himself .
• Consultants: Committee has authority to retain compensation consultants; no interlocks disclosed in 2024 .
• Composition: Only two independent members, with CEO serving as chair, heightening independence concerns despite recusals .

Equity Ownership & Alignment (multi‑year compensation snapshot)

Employment Terms (selected)

• Severance single trigger and change‑of‑control acceleration; LTI grant continuation; full vesting; 280G gross‑up .
• Non‑compete/non‑solicitation durations detailed above .

Board Service History, Committees, Dual‑Role Implications

• Board service: Director since 2018; Chairman and CEO; chairs Compensation and Nominating Committees; not independent .
• Dual roles: Combining CEO and Chair, plus chairing two committees, heightens independence concerns; mitigated partially by Lead Independent Director and executive sessions of independent directors .
• Attendance: Recused from parts of compensation committee leading to <75% attendance at that committee in 2024 .

Investment Implications

• Alignment positives: Very high beneficial ownership (19.94%), significant options/warrants exposure, and history of restructuring bonuses into company debt/equity suggest strong personal leverage to Jushi outcomes .
• Overhang/selling pressure: Large S‑3 registrations (44.66M shares for Cacioppo; 23.4M shares tied to lender warrants including affiliates) create potential supply overhang; monitor resale activity and lock‑up terms if any .
• Governance risks: Option repricing at $0.54 with vesting restarts, 280G gross‑up, combined CEO/Chair plus committee chairs, and absence of formal related‑party policy elevate governance risk and may warrant a higher risk premium or engagement ask list .
• Retention economics: Single‑trigger $5M severance, automatic LTI grant and full vesting on termination/change‑of‑control materially raise transition costs; may deter hostile actions but can be shareholder‑unfriendly if performance lags .
• Operational/controls backdrop: Prior MCTO and an affiliate bankruptcy (Jushi Europe SA) underscore historical control and credit risks; weigh against improvements in audit oversight and committee independence on the Audit side .